Md. legislators gauge impact of U.S. gas tax to state's plan

Some Maryland legislators say the federal government's proposed dime-a-gallon gasoline tax increase could make it more difficult for the state to raise its gasoline tax next year.

"This certainly sheds a different light on what we would do, I would think," said Delegate Tyras S. Athey, D-Anne Arundel, who chairs the House Ways and Means Committee. "It's going to make it doubly difficult [for us] to do."

While legislators and state officials stressed that they will have to study the five-year, half-trillion-dollar deficit reduction package before assessing its impact, they pointed out that the federal gasoline tax increase would take effect at a time when prices at the pump are already soaring from the Persian Gulf crisis.

"How much are you going to put on at once?" asked Sen. Barbara A. Hoffman, D-Baltimore, a member of the Budget and Taxation Committee.

"You do have the issue of reasonableness."

Ever since Gov. William Donald Schaefer pushed through a nickel-a-gallon gas tax increase in 1987, his transportation experts have been predicting that another increase would be necessary this year or next to fund new highway and mass-transit projects.

The state collects about $430 million from its motor-fuels tax, according to Marvin Bond, a spokesman for Maryland Comptroller Louis L. Goldstein.

The governor was expected to propose a gas-tax increase of undetermined size when the General Assembly convenes in January. But turmoil in the Middle East and the federal government's proposal to raise its tax by 5 cents Dec. 1 and another 5 cents July 1 could delay or derail the state's plans to raise its 18.5 cents-a-gallon gas tax.

"It's still not out of the question," said Sen. Laurence Levitan, D-Montgomery, chairman of the Budget and Taxation Committee. "It depends on what happens to gas prices and how people react to them."

Mr. Levitan, who represents traffic-clogged Montgomery County, said the need for a state increase in the gasoline tax remains unchanged and predicted that a majority of the driving public will be willing to pay an extra nickel or dime per gallon for gas to fund badly needed highway improvement and mass transit projects.

"Our alternative is we'll run out of money," he said. "I think faced with that alternative the public will say we have needs, and we want them met."

David S. Iannucci, the governor's chief legislative officer, said he does not know whether Mr. Schaefer will push ahead with a gas tax.

"There's an enormous amount of information we don't have," Mr. Iannucci said. The federal gas tax increase "is just one more element in the stew of factors that will be taken into consideration."

State officials did not expect much impact from the rest of the deficit proposal package, which includes additional taxes on cigarettes, liquor, beer, wine and luxury goods.